The price of Brent crude oil for delivery in September - set in London and a benchmark for oil prices worldwide - rose 36 US cents to $29.17 a barrel.

US light crude, the main benchmark on Wall Street, added 27 cents to $31.32.

Brent crude, which acts as a benchmark for oil prices worldwide, was 35 cents a barrel up at $29.16.

Gasoline for September delivery was trading at $1 a gallon, having touched $1.25 last week, its highest level since the Iraq war.

Recovery at risk

The contract to provide additional guards has been awarded to an international security company already working in Iraq.

The guards - expected to be mostly Iraqis - will include some of those carrying out similar work along the pipeline and members of local tribes.

Our correspondent says it is a massive task and questions are already being asked about the level of commitment such guards might have in the face of an attack.

The US governor of Iraq, Paul Bremer, has already warned that Iraq's economic recovery will be hit if the country's infrastructure continues to suffer sabotage attacks - blamed on supporters of the former Saddam Hussein regime.

During the weekend, an attack on a water main left 300,000 people in Baghdad without water, while a mortar attack on a prison killed six Iraqis and injured 59 others.

Elsewhere, a fire in a sewage treatment plant was reported.

"The irony is that Iraq is a rich country that is temporarily poor," Mr Bremer told the meeting of a committee coordinating foreign aid for Iraq.

'Security void'

The damaged pipeline carries oil from the giant oilfields at Kirkuk, which accounts for 40% of Iraq's oil production, to a Turkish terminal at Ceyhan.

The pipeline was disabled on Friday when a fire broke out at a section in Bajii, north of Tikrit, the home town of ousted Iraqi leader Saddam Hussein.

The fire came just two days after the pipeline had reopened for the first time since the invasion of Iraq in March.

Officials said it appeared the fire had been started deliberately.

"We believe at this stage it was an explosive device planted on the pipeline," said the US-appointed interim oil minister in Iraq, Thamir Ghadban, following the blast.